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March 2, 2016

Camera Manufacturer Olympus Agrees to Pay Largest-Ever Anti-Kickback Settlement to U.S. Government

The U.S. unit of well-known camera and medical device manufacturer, Olympus, has agreed to pay more than $623 million in civil and criminal penalties for violating the U.S. government’s False Claims Act. Prosecutors are calling this the largest anti-kickback settlement to date. The U.S. attorney’s office for the District of New Jersey alleges that Olympus paid almost $3 million to government health practitioners in Latin America to increase sales of its product in that part of the world. Olympus admitted that these kickbacks violated the Foreign Corrupt Practices Act. John Slowik, Olympus’ former chief compliance officer, brought the violations to light in 2010 as part of a whistleblower lawsuit against the company. Contact a Massachusetts Whistleblower Attorney Today.

Slowik’s allegations helped to uncover multiple violations by Olympus executives and senior employees, including kickbacks in the form of trips to Japan, expensive meals, spa treatments, golf trips, and consulting fees. “There was a relatively widespread pattern of the company using various forms of financial benefits—cash, trips, consulting agreements—to induce doctors, hospitals and other health-care providers to buy their stuff,” said Paul J. Fishman, the U.S. attorney for New Jersey. Olympus admitted to the misconduct of its senior employees and executives.

Kickbacks Helped Olympus Generate $230 Million in Profits

According to Olympus and federal prosecutors, the kickbacks generated approximately $600 million in sales of medical equipment between 2006 and 2011, resulting in about $230 million in profits for the company. The majority of the medical device sales were for endoscopes; long tubes affixed with miniature cameras that allow physicians to perform internal examinations of patients’ lungs and colons. According to the settlement agreement, some of these endoscopes were sold for more than $20,000 each.

Whistleblower Set to Receive $51.1 Million

As compensation for his role in uncovering these violations, Mr. Slowik will receive $51.1 million. According to his attorneys, Slowik initially tried to report the violations internally, but his attempts to resolve the issues were unsuccessful.

In addition to paying hundreds of millions in penalties, as part of the settlement agreement, Olympus must also improve its compliance training and assign an independent monitor to oversee compliance for a minimum of three years. If the company violates any of the agreed upon requirements within the three-year period, the government is entitled to pursue criminal charges.

If you have information about fraudulent or illegal activities being committed against the U.S. government, the whistleblower lawyers at Altman & Altman, LLP can help you determine how to move forward. Our legal team understands the sensitive nature of whistleblower cases. You may be concerned about retaliation by your employer, or other ramifications. Fortunately, there are multiple protections available for whistleblowers who report illegal activities committed against the U.S. government. Additionally, any meeting with our lawyers and legal staff is 100% confidential. At Altman & Altman, LLP, we can help you determine whether it makes sense to move forward with a whistleblower lawsuit. Whistleblower compensation can be up to 30% of the settlement. Considering that these settlements are often in the tens – or hundreds – of millions, 30% can be a substantial amount of money. Contact us today for a free consultation about your case.